Key Points
- Analysts suggest that the stable price action of Bitcoin could be beneficial for miners.
- Publicly-listed miners are expected to grow their market share through organic and acquisition-led expansion.
Bernstein analysts have voiced that the current steady price movement of Bitcoin (BTC) could be advantageous for miners. This is particularly true in situations where economics are influenced by competitive hash-rate wars.
Bitcoin’s Price Action and Hash Rate
The analysts, Gautam Chhugani and Mahika Sapra, mentioned in a note to clients that they don’t anticipate any significant drop in Bitcoin’s price. They expect Bitcoin to remain within a certain range and continue its upward adoption trajectory as Bitcoin ETFs get allocations from Registered Investment Advisors, wealth platforms, and other institutional funds. Bitcoin is currently trading at around $62,800.
On Thursday, the mining difficulty of Bitcoin dropped 5.7%, which is the largest negative adjustment since the bear market lows when the difficulty fell 7% on December 6, 2022, and Bitcoin was trading for around $17,000. The mining difficulty of Bitcoin is a relative measure of the difficulty of mining a new block compared to the easiest it can ever be.
Impact on Public Bitcoin Miners
Despite the overall decrease in the total hash rate of the Bitcoin network following its fourth halving event, the market share of publicly-listed miners Marathon Digital, Riot, and CleanSpark has slightly increased. The analysts expect these miners to further consolidate their market share through organic and merger and acquisition-led expansion, given their strong Bitcoin balance sheets and cash positions.
CleanSpark recently acquired three mining sites in Mississippi for around $20 million and agreed to purchase another two sites in Wyoming for approximately $19 million. Marathon also recently acquired new sites at a cost of around $265 million. Meanwhile, Riot is working on tripling its capacity via an expansion at its Corsicana site in Texas.
Chhugani and Sapra note that a temporary pause in Bitcoin’s price could be beneficial for lower-cost Bitcoin miners, as hash rates remain capped and strong miners can execute their aggressive capital expenditure and M&A plans to grow market share. They also reiterated their $150,000 Bitcoin price prediction for this cycle, citing a variety of factors.
